Is Hyderabad going the Kolkata way?

Industrialists are afraid that Hyderabad, which accounts for nearly 60 per cent of the industrial activity in Andhra Pradesh, will go the Kolkata way as far as investments are concerned.

They said the movement for a separate statehood to the Telangana region was taking its toll.

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Frequent bandhs in the past two years had resulted in huge production loss and choking of investments in the state capital.

According to the Federation of Andhra Pradesh Chambers of Commerce & Industry, what is happening to Hyderabad today on the industrial front is comparable to what happened to Kolkata.

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About four decades ago, Kolkata was one of the top destinations for investments in India.

But no more.

In fact, there had been a flight of capital from the city over a period of time, thanks to frequent agitations and labour problems.

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"If the current disturbances continue to rock the state, Hyderabad, which had been the preferred destination for investments just two years ago, is likely to go the Kolkata way," Fapcci office bearers told mediapersons on Thursday.

The cities that were stated to being benefited at the cost of Hyderabad were Pune, Bangalore, Chennai and Gurgaon.

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According to the estimate of Fapcci president VS Raju, a day's bandh observed in the state capital costs the industry about Rs. 400 crore (Rs. 4 billion).

And, there were 17 bandhs in the past one year resulting in a production loss of about Rs. 6,800 crore (Rs. 68 billion).

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Raju's estimates were based on the drop in power consumption by the industry on the bandh day.

The industrial power consumption during a day's shut-down declines by 400-500 Mw.

Fapcci senior vice president, Devendra Surana, said Hyderabad had lost 20,000 jobs in the manufacturing sector and an additional 40,000 jobs in the services sector due to the ongoing agitation.

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Because of the frequent disturbances, the companies that had planned to invest in the state have diverted their investments to other states.

"For instance, Xerox, which had planned to set up another unit here is now setting up a plant in Tamil Nadu.

"So is Quard Cables and auto components outfit of the Surana group. This meant a loss of 1,000 jobs," Surana said.

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Even in the services sector, he said, many companies had stalled their expansion plans.

These include Intelligroup, Cognizant and Kedia Infotech.

Surana said even he was being forced to set up an auto components unit in Chennai.

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"I supply components to the auto industry in Chennai. Last month, due to disturbances, I was forced to send the components by flight instead of by road.

"This had cost me Rs. 5 lakh as against my usual expenditure of Rs. 20,000. Now, the auto makers are forcing me to set up a unit in Chennai to avoid any disruption in the supply chain," he said.

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"The industry is incurring the wrath of its customers," Fapcci said appealing to the agitators to exempt industry, trade and other commercial activities from shutting down whenever a bandh call is given.